Simon Black: Priced To Fantasy

Stock prices today simply aren't justifiable

by Adam Taggart

We were able to steal away for an hour to sit down with fellow presenter Simon Black (founder of SovereignMan.com) and this excellent discussion ensued. We didn't have any agenda prepared; it's just us three riffing and sharing our thoughts on the most likely implications of the biggest macro risks that have our attention right now.

As Simon summarized:

I spent some time with Chris and Adam last year and they’re really great and smart guys. We’re very aligned philosophically, so I was curious to hear their thoughts on the economy today… and where they see some opportunities.

I enjoyed this conversation more than any other podcast in recent memory.

In our wide-ranging discussion, we covered everything from where we see energy prices going to the geopolitical risks we see today (including the recent tragedy in Syria) to the insane, cash-burning business models of today’s tech darlings.

We all agree the stock market today is “priced to fantasy” and toward the end of our discussion, we shared some specific things you can do, right now, to protect your capital and still prosper while waiting for the inevitable correction.

We talk about gold, raising cash, investing in cash alternatives (including assets that are actually safer and higher-yielding than cash in the bank) and what we’re all personally doing with our own money today.

Simon recently posted this podcast to his audience and we thought you would all enjoy it, too.

Click the play button below to listen to Chris' interview with Simon Black (66m:29s).

Great podcast

Which starts with a picture of a cat holding a magnum riding a fire-breathing unicorn. How can you go wrong?

In all seriousness, I loved the back and forth of the podcast. It's nice to hear the banter and humor, and it felt like I was right there in the room with you three. There weren't many "new" insights, but I loved when Simon asked Chris and Adam to summarize PeakProsperity's mission, etc. It was nice to hear a reiteration of what the site's philosophy is, even if I already knew it. I really liked hearing three perspectives in one podcast!

If I could pick nits, there were a few sound issues where voices would drop off, but I attribute that to the set-up required to pull this off in the first place, so all things considered it was good. Last, there were a few times when Adam would say something, but then got talked over. Minor points, both, but I figured I'd give feedback.

Japan, etc.

Chris: I've never been able to understand why it is that the Japanese yen is consider, basically, a safe haven currency because, to me, that's the number one major currency most likely to die first for obvious reasons.Simon: I've said the same thing. I think the order is sort of Japan and then maybe the euro, and then…

An engineer would say: whenever the data doesn't make sense, it usually means that one's understanding of the system is incorrect. This is the most logical hypothesis.
An alternative view? Japan produces real wealth due to having a high-IQ, unified population. So their currency can do whatever it wants. The forgotten variable is human capital.

Chris: Belgrade. Every street corner had a group of six to eight men there who were just not speaking the language and had nothing better to do and had very different cultural views of women. So her beautiful city had been taken away,

The above quote is a solid example of what happens when a culture denies the reality of human capital. People and culture are not interchangeable. Some people and cultures are productive and generate wealth, others don't. And IMO most of the economic fantasies these days result from ignoring the simple reality of human and cultural capital and instead focusing on tangibles: resources, land, property, oil, etc. The latter is fungible. The former is everything. Japan is a great example. And it all makes sense through this proper lens.

Meeting Simon was great

Snydeman wrote:

If I could pick nits, there were a few sound issues where voices would drop off, but I attribute that to the set-up required to pull this off in the first place, so all things considered it was good. Last, there were a few times when Adam would say something, but then got talked over. Minor points, both, but I figured I'd give feedback.

Simon is a really great person and an extraordinary businessman. The insights he delivered to a young investors meeting, and then later at an agricultural investing session, were crisp and useful, each in their own way (no repetition).
The sound issue was three guys, one microphone, on a boat, with varying degrees of awareness of how important it is to keep a measured distance between oneself and a live mic.
🙂

Agree completely

Agree completely - this was a great podcast - entertaining, informative (like Simon’s style and description) and a nice insight into, what felt like, a behind the scenes discussion. Thanks for sharing.